The Ethereum upgrade introduced a mechanism that burns ETH every minute from transactions. Moreover, the recent frenzy and interest in NFTs have also taken the issue to another level.
On 15th August 2021, the network recorded the highest burn rate of about 27.9 ETH/per minute. This amount came up as Ethereum users competed desperately for CyberKongz VX NFTs.
The community has been expecting the launch of the CyberKongz VX project. As the project went live on August 15, many people competed to grab block space to mint the NFT gorilla.
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Unfortunately, the “gas wars,” as many people call it, led to excess burning of Ethereum on Sunday afternoon.
More Minting Led To More Ethereum Burning
The total number of CyberKongz that the users minted was up to 10,000. This was a few minutes after the project’s launch, which skyrocketed the gas prices to more than 1800 gwei.
This number resulted in a total of 27.90 Ethereum or $91.205 burned every minute. Given the high prices, the cost of minting one Kong went above $1800, which included the tips that miners receive to process transactions.
$1800 gas fee to mint a Kongz today. Bullish on Ethereum, since it’s now getting burned.🔥
— Beanie (@beaniemaxi) August 16, 2021
The whole gas wars on the CyberKongz VX minting led to a total of $4.7 million in Ethereum burned. This amount was double what the OpenSea marketplace for NFT consumed in 24 hours.
Yeah… That's wild. pic.twitter.com/v3Hg5ZQIvw
— Alucard.eth 🦇🔊 (@Alucard_eth) August 15, 2021
With that, the community discovered that the project was the top NFT launch that destroyed a lot of Ethereum in its wake.
The NFT Craze At Fever Peak
It is not surprising that users were willing to burn this much Ethereum to mint the NFT. The craze for NFT is reaching its peak, and many projects are recording huge levels of demand.
For instance, top projects such as Bored Ape Yacht Club and Pudgy Penguins are being mopped off the market with increasing price levels.
Even the new projects emerging now see more investors as flippers and speculators keep pouring funds into them. From the launch of the EIP-1559 upgrade on August 5, there must be a portion of fees burned in Ethereum from all transactions.
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As a result of this mechanism, the network maintains deflationary levels when users’ activities are high. From then until now, the Ethereum network has recorded a total of 51,754 ETH burned. This number amounts to more than $169 million at the current price of Ethereum.
As of writing this news, Ethereum trades at $3225 recording a 2% dip | Source: ETHUSD on TradingView.com
There are still many speculations that more and more Ethereum will be burned as many NFTs will be launching this week. More people will fight the wars again, given the excessive hypes that follow the upcoming projects.
Featured image from The Conversation, chart from TradingView.com